A decent third quarter 2012, rising estimates, planned cost cutting, acquisition of Contrail, and higher spending announced by its customer AT&T Inc. (T) are the rank drivers for this stock.

Juniper acquired software-based networking startup Contrail Systems for $176 million in cash in December 2012. Contrail Systems primarily develops software to update and configure networking equipment instead of manually adjusting networking hardware. The acquisition is expected to help Juniper to stand its ground against stiff competition from rivals like Cisco Systems Inc. (CSCO).

Juniper posted adjusted earnings per share of 14 cents in the third quarter of 2012, above the Zacks Consensus Estimate of 10 cents. Year-over-year revenue growth of 1.1% came on the back of Switching and Services sales, contribution from Europe, as well as Service Providers, which were partially offset by lower Security solutions sales, weak contribution from Enterprises and the Asia-Pacific region.

During the quarter, Juniper announced its plans to reduce 500 positions, which will save roughly $150.0 million in operating expenses annually.

We believe that with operating cost control and acquisition synergies, Juniper will be able to outperform its peers.

For 2012, 9 out of 11 estimates were revised higher over the last 60 days. For 2013, 8 out of the 11 estimates moved upward.

Despite the positive estimate revisions, the Zacks Consensus Estimate for 2012 remained unchanged at 48 cents in the last 60 days. However, the Zacks Consensus Estimate for 2013 went up by a penny to 85 cents in the last 60 days.

Although the Zacks Consensus Estimate did not show much movement, we believe that Juniper has the potential to post a positive earnings surprise in the upcoming quarter. For the past four quarters, Juniper has posted an average surprise of 21.1%.